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(2023) 3 Centax 49 (S.C.)/2023 (384) E.L.T. 8 (S.C.) [01-02-2023]

(2023) 3 Centax 49 (S.C.)

IN THE SUPREME COURT OF INDIA
S. Ravindra Bhat and Dipankar Datta, JJ.
GODREJ SARA LEE LTD.
Versus
EXCISE AND TAXATION OFFICER-CUM-ASSESSING AUTHORITY
Civil Appeal No. 5393 of 2010, decided on 1-2-2023

VAT : Where Tribunal held that mosquito repellant manufactured by

assessee was liable to 4 per cent VAT instead of 10 per cent and said
order, not being challenged, became final and relying on same, Assessing
Officer had passed his order, Revisionary Authority could not take up
case for revision in view of exception made in Section 34
VAT : When question raised in writ petition was a pure question of law
on jurisdiction of Revisionary Authority to pass order in revision,
availability of alternative remedy was no bar to exercise writ jurisdiction
VAT : Power to issue prerogative writs is plenary in nature without
restrictions except those imposed in Constitution itself
VAT : Exceptions for exercise of writ jurisdiction despite availability of
alternative remedy are cases of violation of fundamental rights,
principles of natural justice, challange to vires of an Act
VAT : Order of Appellate Tribunal under Haryana VAT Act, 2003 was
binding on lower authorities including Revisionary Authority

Revision (VAT) - Scope of - In terms of Section 34 of Haryana VAT Act, 2003, Revisionary Authority has suo
motu power to review orders of assessment to examine legality and propriety of assessment - However,
there is an exception to this power that it could not be exercised in case where issue was pending or
settled by Appellate authority, including Tribunal or Court - In instant case, issue involved was taxability of
Mosquito Repellent under VAT Act - Assessing Officer relying on a finalized Tribunal order, had held that
said goods, being pesticides, were taxable @ 4 per cent - Revisionary Authority, in its order, relied upon
order of Apex Court in case of Sonic Electrochem v. STO 1998 taxmann.com 1735/111 STC 181 wherein it was
held that Jet Mat, a mosquito repellent, was taxable at 10 per cent VAT - Tribunal in its finalized order ibid,
had distinguished aforesaid Apex Court order on facts inasmuch that it was issued under Gujarat VAT Act
where there was a specific entry by name of said product Jet Mat but there was no such specific entry in
Haryana VAT Act - Tribunal Order was not appealed against; hence, it had attained finality - Therefore,
Revisionary Authority could not take up case for revision in view of exception made in Section 34 ibid - Even
otherwise, order of assessing authority was based on finalized order of Tribunal which was binding upon
him and, therefore, said assessment order could not be termed as illegal or improper - Further, Tribunal's
decision was not shown to have been set aside or stayed by a competent Court nor any order of any other
competent Tribunal or High Court taking a different view was brought on record for reopening matter -
Since, Revisionary Authority, failed to follow binding finalized order of Tribunal, its order was suffering
from patent illegality - Section 34 of Haryana VAT Act, 2003. [paras 27 to 37, 40]
Writ Jurisdiction - Question of law - Alternative remedy, availability of - In impugned order, High Court
had not entertained writ petition on ground of availability of alternative remedy of appeal against
impugned order of Revisionary Authority passed assessment order - Said writ petition had been filed by
appellant herein, inter alia, on ground of lack of jurisdiction of revisionary authority to reopen assessment
proceedings suo motu under section 34 of Haryana VAT Act, 2003 as issue on merits had already been
settled by finalized order of Tribunal - It was pleaded that existing facts and circumstances were leading to
only conclusion that assessment orders were legally correct and that order in revision was passed upon
assuming a jurisdiction which Revisional Authority did not possess - Clearly aforesaid question raised in writ
petition was a pure question of law - Settled in judgments State of U.P. v. Indian Hume Pipe Co. Ltd. 1977
taxmann.com 40/1977 (39) E.L.T. 355 (SC) and Union of India v. State of Haryana [2000] 10 SCC 482 that in
matters where controversy was purely legal without disputed questions of fact but only questions of law,
then writ jurisdiction should be exercised instead of dismissing writ petition on ground of availability of
alternative remedy - Further, exceptions detailed by Apex Court for exercising writ jurisdiction despite
availability of alternative remedy, inter alia, also include matters where jurisdictional issue is involved -
Therefore, writ petition required consideration on merits and ought not to have been thrown out on
threshold on ground of availability of alternative remedy - Impugned order of dismissal of writ petition
without examining merits of challenge, could not be sustained - High Court having committed a manifest
error of law, impugned order was to be set aside - Article 226 of Constitution of India. [paras 8 to 13]
Writ Jurisdiction - Existence of Alternative Remedy - Maintainability vis-à-vis Entertainability - Power to
issue prerogative writs under Article 226 of Constitution of India is plenary in nature and no restriction or
limitation is imposed under said Article for exercise of this power unless specifically barred under any
other Article of Constitution (e.g. Article 329) - Availability of alternative remedy of appeal is only a self-
imposed restriction and not a bar to exercise writ jurisdiction - True, writ jurisdiction should not be
exercised in routine manner in such cases but it should also not be dismissed mechanically as 'not
maintainable' only because petitioner has approached High Court without availing alternative remedy -
Facts of each particular case have to be considered before exercising discretion whether to entertain a
writ petition or not - Settled that a rule providing to pursue alternative remedy provided by a statute, is a
rule of policy, convenience and discretion rather than a rule of law - Further 'entertainability' and
'maintainability' of a writ petition are distinct concepts and fine distinction between two must not be lost
sight of - While, objection as to 'maintainability' goes to root of issue, question of 'entertainability' is
entirely within realm of discretion - A writ petition despite being maintainable may not be entertained for
many reasons - But, dismissal of a writ petition on ground of availability of alternative remedy without
examining whether an exceptional case has been made out for such entertainment, would not be proper -
Article 226 of Constitution of India. [para 4]
Writ Jurisdiction - Alternative Remedy, existence of - Exceptions thereto - Exceptions for exercise of
writ jurisdiction despite availability of alternative remedy are cases where writ petition seeks enforcement
of any of fundamental rights; where there is violation of principles of natural justice; where order or
proceedings are wholly without jurisdiction; or where vires of an Act is challenged - Article 226 of
Constitution of India. [paras 6, 7]
Order of Appellate Tribunal - Binding nature - Strictures against Revisionary Authority - Decisions
rendered by Appellate Tribunal were binding not only Assessing Officer but on Revisionary Authority also -
Therefore, Assessing Officer had no option but to pass assessment order in terms of this decision -
Revisionary Authority being also bound by said order, was unjustified in branding assessment order as
suffering from illegality and impropriety - It demonstrated his thorough lack of understanding of principle
regulating exercise of suo motu revisional power by a quasi-judicial authority - In addition it was also a
breach of principle of judicial discipline, while confronted with orders passed by a superior Tribunal/Court -
Settled that unless discipline of adhering to decisions of higher authorities is maintained, there would be
utter chaos in administration of tax laws apart from undue harassment to assesses. [para 34]
Appeal allowed in favour of assessee
CASE REVIEW
Godrej Sara Lee Ltd. v. State of Haryana — Civil Writ Petition No. 9191 of 2009, decided on 12-10-2009 by Punjab & Haryana
High Court — Reversed — [Para 1]
CASES CITED
Asstt. Commissioner of State Tax v. Commercial Steel Ltd. — [2021] 130 taxmann.com 180/2021 (52) GSTL 385 (SC) — Relied
on — [Para 7]
Sonic Electrochem v. STO — 1998 taxmann.com 1735 — Referred — [Paras 20, 21, 24, 29]
State of UP. v. Indian Hume Pipe Co. Ltd. — 1977 taxmann.com 40/1977 (39) E.L.T. 355 (SC) — Relied on — [Para 8]
State of Uttar Pradesh v. Mohd. Nooh — 1958 SCR 595 — Distinguished — [Paras 5, 11]
Titagarh Paper Mills v. Orissa State Electricity Board — [1975] 2 SCC 436 — Distinguished — [Paras 3, 10, 11]
Titaghur Paper Mills Co. Ltd. v. State of Orissa — [1983] 2 SCC 433 — Distinguished — [Para 11]
Union of India v. Kamlakshi Finance Corpn. Ltd. — 1992 taxmann.com 16/1991 (55) ELT 433 (SC) — Relied on — [Paras 22, 34]
Union of India v. State of Haryana — [2000] 10 SCC 482 — Relied on — [Para 8]
Whirlpool Corpn. v. Registrar of Trade Marks — [1998] 8 SCC 1 — Relied on — [Para 6]
NOTIFICATION CITED
Notification dated 30-6-2005 [Para 16]

REPRESENTED BY : S/Shri V. Lakshmikumaran, Adv., Rajiv Tyagi, AOR, Rohit Gupta, Ms. Apeksha Mehta, Ms. Falguni Gupta and P.
Mundra, Advocates for the Appellant.
Shri Kamal Mohan Gupta, AOR, for the Repondent.
[Judgment Per : Dipankar Datta, J.]. - This appeal, by special leave, registers a challenge to an order dated 12th
October, 2009 passed by the High Court of Punjab and Haryana at Chandigarh (hereafter 'the High Court', for short)
dismissing Civil Writ Petition No. 9191 of 2009 presented by the appellant and relegating it to the remedy of an appeal
under section 33 of the Haryana Value Added Tax Act, 2003 (hereafter 'the VAT Act', for short).
2. Two questions emerge for decision on this appeal. First, whether the High Court was justified in declining
interference on the ground of availability of an alternative remedy of appeal to the appellant under section 33 of the
VAT Act, which it had not pursued. Should the answer to the first question be in the negative, we would next be
required to decide whether to remit the writ petition to the High Court for hearing it on merits or to examine the
correctness or otherwise of the orders impugned before the High Court.
3. It appears on a perusal of the order under challenge in this appeal that the appellant had questioned the
jurisdiction of the Deputy Excise and Taxation Commissioner (ST)-cum-Revisional Authority, Kurukshetra (hereafter
'the Revisional Authority', for short) to reopen proceedings, in exercise of suo motu revisional power conferred by
section 34 of the VAT Act, and to pass final orders holding that the two assessment orders, both dated 28th February,
2007 passed by the ETO-cum-Assessing Authority, Kurukshetra (hereafter 'the Assessing Authority', for short) for the
assessment years 2003-04 and 2004-05 suffered from illegality and impropriety as delineated therein, viz. that the
Assessing Authority erred in levying tax on mosquito repellant (a product manufactured by the appellant) @ 4%
instead of 10%. Keeping in view the objection raised by counsel for the respondents that without exhausting the
remedy of appeal provided by section 33 of the VAT Act "it would not be permissible to entertain this petition" and
upon consideration of the decision of this Court reported in Titagarh Paper Mills v. Orissa State Electricity Board & Anr.
(1975) 2 SCC 436 based on which it was contended on their behalf that where any right or liberty arises under a
particular Act then the remedy available under that Act has to be availed, the High Court was of the opinion that there
can be no presumption that the appellate authority would not be able to grant relief sought in the writ petition;
hence, the writ petition was dismissed and the appellants were relegated to the appellate remedy.
4. Before answering the questions, we feel the urge to say a few words on the exercise of writ powers conferred
by Article 226 of the Constitution having come across certain orders passed by the high courts holding writ petitions
as "not maintainable" merely because the alternative remedy provided by the relevant statutes has not been pursued
by the parties desirous of invocation of the writ jurisdiction. The power to issue prerogative writs under Article 226 is
plenary in nature. Any limitation on the exercise of such power must be traceable in the Constitution itself. Profitable
reference in this regard may be made to Article 329 and ordainments of other similarly worded articles in the
Constitution. Article 226 does not, in terms, impose any limitation or restraint on the exercise of power to issue writs.
While it is true that exercise of writ powers despite availability of a remedy under the very statute which has been
invoked and has given rise to the action impugned in the writ petition ought not to be made in a routine manner, yet,
the mere fact that the petitioner before the high court, in a given case, has not pursued the alternative remedy
available to him/it cannot mechanically be construed as a ground for its dismissal. It is axiomatic that the high courts
(bearing in mind the facts of each particular case) have a discretion whether to entertain a writ petition or not. One of
the self-imposed restrictions on the exercise of power under Article 226 that has evolved through judicial precedents
is that the high courts should normally not entertain a writ petition, where an effective and efficacious alternative
remedy is available. At the same time, it must be remembered that mere availability of an alternative remedy of
appeal or revision, which the party invoking the jurisdiction of the high court under Article 226 has not pursued, would
not oust the jurisdiction of the high court and render a writ petition "not maintainable". In a long line of decisions, this
Court has made it clear that availability of an alternative remedy does not operate as an absolute bar to the
"maintainability" of a writ petition and that the rule, which requires a party to pursue the alternative remedy provided
by a statute, is a rule of policy, convenience and discretion rather than a rule of law. Though elementary, it needs to be
restated that "entertainability" and "maintainability" of a writ petition are distinct concepts. The fine but real
distinction between the two ought not to be lost sight of. The objection as to "maintainability" goes to the root of the
matter and if such objection were found to be of substance, the courts would be rendered incapable of even receiving
the lis for adjudication. On the other hand, the question of "entertainability" is entirely within the realm of discretion
of the high courts, writ remedy being discretionary. A writ petition despite being maintainable may not be entertained
by a high court for very many reasons or relief could even be refused to the petitioner, despite setting up a sound
legal point, if grant of the claimed relief would not further public interest. Hence, dismissal of a writ petition by a high
court on the ground that the petitioner has not availed the alternative remedy without, however, examining whether
an exceptional case has been made out for such entertainment would not be proper.
5. A little after the dawn of the Constitution, a Constitution Bench of this Court in its decision reported in State of
Uttar Pradesh v. Mohd. Nooh 1958 SCR 595 had the occasion to observe as follows:
"10. In the next place it must be borne in mind that there is no rule, with regard to certiorari as there is with
mandamus, that it will lie only where there is no other equally effective remedy. It is well established that,
provided the requisite grounds exist, certiorari will lie although a right of appeal has been conferred by statute,
(Halsbury's Laws of England, 3rd Edn., Vol. 11, p. 130 and the cases cited there). The fact that the aggrieved party
has another and adequate remedy may be taken into consideration by the superior court in arriving at a
conclusion as to whether it should, in exercise of its discretion, issue a writ of certiorari to quash the proceedings
and decisions of inferior courts subordinate to it and ordinarily the superior court will decline to interfere until
the aggrieved party has exhausted his other statutory remedies, if any. But this rule requiring the exhaustion of
statutory remedies before the writ will be granted is a rule of policy, convenience and discretion rather than a
rule of law and instances are numerous where a writ of certiorari has been issued in spite of the fact that the
aggrieved party had other adequate legal remedies. * * *"
6. At the end of the last century, this Court in paragraph 15 of the its decision reported in (1998) 8 SCC 1 (Whirlpool
Corporation v. Registrar of Trade Marks, Mumbai and Others) carved out the exceptions on the existence whereof a Writ
Court would be justified in entertaining a writ petition despite the party approaching it not having availed the
alternative remedy provided by the statute. The same read as under:
(i)   where the writ petition seeks enforcement of any of the fundamental rights;
(ii)   where there is violation of principles of natural justice;
(iii)   where the order or the proceedings are wholly without jurisdiction; or
(iv)   where the vires of an Act is challenged.
7. Not too long ago, this Court in its decision reported in 2021 SCC OnLine SC 884/2021 (52) GSTL 385 (S.C.)
Assistant Commissioner of State Tax v. Commercial Steel Limited [2021] 130 taxmann.com 180 (SC) has reiterated the same
principles in paragraph 11.
8. That apart, we may also usefully refer to the decisions of this Court reported in (1977) 2 SCC 724 State of Uttar
Pradesh & ors. v. Indian Hume Pipe Co. Ltd. 1977 taxmann.com 40/1977 (39) E.L.T. 355 (SC) and (2000) 10 SCC 482 (Union
of India v. State of Haryana). What appears on a plain reading of the former decision is that whether a certain item falls
within an entry in a sales tax statute, raises a pure question of law and if investigation into facts is unnecessary, the
high court could entertain a writ petition in its discretion even though the alternative remedy was not availed of; and,
unless exercise of discretion is shown to be unreasonable or perverse, this Court would not interfere. In the latter
decision, this Court found the issue raised by the appellant to be pristinely legal requiring determination by the high
court without putting the appellant through the mill of statutory appeals in the hierarchy. What follows from the said
decisions is that where the controversy is a purely legal one and it does not involve disputed questions of fact but
only questions of law, then it should be decided by the high court instead of dismissing the writ petition on the
ground of an alternative remedy being available.
9. Now, reverting to the facts of this appeal, we find that the appellant had claimed before the High Court that
the suo motu revisional power could not have been exercised by the Revisional Authority in view of the existing facts
and circumstances leading to the only conclusion that the assessment orders were legally correct and that the final
orders impugned in the writ petition were passed upon assuming a jurisdiction which the Revisional Authority did not
possess. In fine, the orders impugned were passed wholly without jurisdiction. Since a jurisdictional issue was raised
by the appellant in the writ petition questioning the very competence of the Revisional Authority to exercise suo motu
power, being a pure question of law, we are of the considered view that the plea raised in the writ petition did deserve
a consideration on merits and the appellant's writ petition ought not to have been thrown out at the threshold.
10. Reliance placed by the High Court on the decision in Titagarh Paper Mills (supra), in our view, was completely
misplaced. The respondent Electricity Board had levied coal surcharge on the appellant company in terms of an
agreement. Such agreement contained an arbitration agreement in clause 23. Instead of pursuing its remedy in
arbitration, the appellant company unsuccessfully invoked the writ jurisdiction. This Court was approached
whereupon it was held that in view of the issues raised, there was no reason why the appellant company should not
pursue its remedy in arbitration, having solemnly accepted clause 23 of the agreement, and instead invoke the
extraordinary jurisdiction of the high court under Article 226 of the Constitution to determine questions which really
form the subject matter of the arbitration agreement. This decision could not have been of any relevance having
regard to the issue presented for resolution before the High Court by the appellant, particularly when the disputes
inter se were not referable to arbitration.
11. We have reasons to believe, considering the nature of objection raised by the respondents as recorded by the
High Court in the impugned order, that the High Court had mistakenly referred to Titagarh Paper Mills (supra) while
intending to rely on a different decision of this Court on an appeal preferred by the same party, reported in (1983) 2
SCC 433 (Titaghur Paper Mills Co. Ltd. v. State of Orissa). While upholding the impugned order of dismissal of the writ
petition, where an order passed by the Sales Tax Officer was under challenge, this Court in Titaghur Paper Mills Co. Ltd.
(supra) held that the challenge being confined to the regularity of proceedings before the Sales Tax Officer and there
being no suggestion that the concerned officer had no jurisdiction to make an assessment, the decision in Mohd. Nooh
(supra) was clearly distinguishable since in that case there was total lack of jurisdiction. This Court also held that under
the scheme of the relevant Act, there was a hierarchy of authorities before which the petitioners can get adequate
redress against the wrongful acts complained of and that since the authority of the concerned officer to make an
assessment was not in question, recourse ought to be taken by initiating proceedings thereunder. As noted above,
the very jurisdiction of the Revisional Authority having been questioned in the writ petition, the impugned order of
the High Court dismissing the writ petition without examining the merits of the challenge cannot be sustained even if
the High Court were to rely on Titaghur Paper Mills Co. Ltd. (supra) to support such order.
12. The High Court by dismissing the writ petition committed a manifest error of law for which the order under
challenge is unsustainable. The same is, accordingly, set aside.
13. Moving on to decide the second question, ordering a remand is an available option for us. However, having
regard to the lapse of time (almost a life term of fourteen years) since the orders impugned in the writ petition were
made, we feel that it would not be in the best interests of justice to remit the matter to the High Court. Since prior to
reserving judgment on this appeal we had heard the parties on the merits of the jurisdictional issue that the appellant
had raised before the High Court, it is time to rule on the jurisdiction of the Revisional Authority.
14. The appellant is engaged in the business of manufacturing, marketing and sales of household insecticide
products in various forms, viz. mosquito coils, mats, refills, aerosols, baits and chalks under the popular brand name
"Good Knight" and "Hit" from, inter alia, its sales office at Kurukshetra, and is an 'assessee' under the VAT Act.
15. In terms of section 7 of the VAT Act, the taxable goods have been classified under Schedules A, B and C. It is
found from Schedule C (as originally enacted) that pesticides, weedicides and insecticides were included in Entry 1 and
taxable @ 4%.
16. Returns were filed by the appellant for the Assessment Years 2003-04 and 2004-05 declaring its gross turnover
from manufacturing and sales of insecticides and pesticides, besides other consumer goods. Such returns were duly
accepted. However, in view of an amendment in Entry 67 of Schedule C introduced by a notification dated 30th June,
2005, notices were issued by the Assessing Authority as to why tax liability @ 10% instead of 4% should not be
imposed. Upon hearing the representative of the appellant, orders dated 28th February, 2007 and 28th March, 2008
were passed by the Assessing Authority for the Assessment Years 2003-04 and 2004-05, respectively, accepting the
classification of goods and the rate of tax as stated by the appellant in its returns, i.e. 4%.
17. Subsequently, the Revisional Authority called for the assessment records of the appellant for the Assessment
Years 2003-04 and 2004-05 for revision of the assessment on classifying the household insecticide products of the
appellant as mosquito repellants and taxable at the higher rate of tax, i.e. 10%, instead of 4%. Initially, show-cause
notices seeking to revise the assessments made for the Assessment Years 2003-04 and 2004-05 were issued, and such
exercise was followed up by identically worded final orders, both dated 2nd March, 2009.
18. Several legal questions including validity of certain notifications were raised by the appellant before the High
Court in its writ petition. Apart from the question as to whether mosquito repellants are goods classifiable as
insecticides, pesticides, weedicides, etc., one other question which the appellant sought to raise was whether an
amendment in the schedule of classification/rates of tax could be applied to completed assessments for the
assessment years prior to the amendment coming into effect. However, before us, the only limited question which
the appellant raised was, whether the orders of the Revisional Authority, both dated 2nd March, 2009, seeking to
revise the orders of the Assessing Authority dated 28th February, 2007 and 28th March, 2008 pertaining to the
Assessment Years 2003-04 and 2004-05, have been issued in exercise of jurisdiction conferred by law.
19. For facility of understanding, it would be convenient at this stage to reproduce the material part from the
revisional order passed in respect of the Assessment Year 2004-05, below:
"I, xxxxxxx, Dy. Excise & Taxation Commissioner-cum-Revisional Authority, Kurukshetra called for the
assessment record of M/s Godrej Sara Lee Ltd., Pipli holding TIN xxxxxxx for the assessment year 2004-05. Shri
xxxxxxx, ETO-cum-Assessing Authority Kurukshetra passed this assessment order on 28-3-2008. On examination
of the assessment record, I was prima facie of the view that the said assessment order suffered from the
following illegalities and impropriates (sic, improprieties):
The assessing authority erred in levying tax on Mosquito Repellant @ 4% Instead of 10%
Accordingly, a show cause notice was issued for 2-3-2009. On 2-3-2009 Shri Ajay Goel, Advocate of the firm
appeared along with application for adjournment on the plea that due to closing month of March, 2009 the
dealer is unable to get the case decided. The application for adjournment is rejected as the dealer has not to
produce any account books or is not to prepare any documents only law point is involved in the case. The dealer
has sold mosquito repellant and deposited tax @ 4%. The Hon'ble Supreme Court of India in the case of M/s
Sonic Electrochem and another v. STO and other (1998) 12-PHT-215 (SC) held that Jet Mat Mosquito Repellant is not
pesticides/insecticides. Therefore, these goods are general goods and liable to tax at general rate of tax. Hence, a
notice was issued to the dealer to explain as to why tax should not be levied at general rate of tax on the sale of
mosquito repellants. The counsel of the firm has not offered any arguments on the issue. In view of the decision
of the Hon'ble Apex Court in the case of M/s Sonic Electrochem and another v. STO and other (1998) 12-PHT-215
(SC), it is unarguable clear that mosquito repellant mats being unscheduled goods are taxable at general rate of
tax. Confusion was also cleared with the amendment to entry 67 vide notification dated 1-7-2005.
In view of the above facts, it is clear that assessing authority while framing assessment has erred in levying tax @
4% on mosquito repellants. Hence the assessment order dated 28-3-2008 is revised u/s 34 of the Act ibid as
under:

  TTO @ 10% Rs. 5,28,89,282 Rs. 52,88,928

  (Mosquito Repellants) Tax already assessed By the AA in original
  Order   Rs. 21,15,571
  Due   Rs. 31,73,357

Issue Tax Demand Notice Challan for Rs. 31,73,357 along with a copy of the order to the dealer."
20. The assessment order dated 28th March, 2008 of the Assessing Authority under section 15 of the VAT Act
pertaining to Assessment Year 2004-05, which was sought to be revised by the Revisional Authority, had taken into
consideration the decision of this Court reported in (1998) 6 SCC 397 Sonic Electrochem v. S.T.O. 1998 taxmann.com
1735/111 STC 181 (SC). The appellant therein having sold 'Jet Mat', a mosquito repellent, it was ruled by this Court that
the same was liable to tax @ 10%. Considering such decision, a notice was issued to the appellant to explain as to why
tax should not be levied @ 10% on the sale of 'Godrej Mat'. Put to notice, it was inter alia argued on behalf of the
appellant before the Assessing Authority that the Haryana Tax Tribunal (hereafter 'the Tribunal', for short),
constituted under section 57 of the VAT Act, by its order dated 21st November, 2001 had the occasion to dismiss a
petition filed by the department seeking review of an earlier order dated 22nd March, 2000. The Assessing Authority
extracted the relevant part of the order 21st November, 2001 of the Tribunal passed on the review petition in its order
dated 28th March, 2008, reading as follows:
"The only limited question to be addressed is whether the ratio of the judgment of the Hon'ble Apex Court
delivered in the above mentioned case of M/s Sonic Electrochem and others is applicable in the present case?
This judgment of the Hon'ble Supreme Court is clearly distinguishable from the facts of the present case as the
said judgment was delivered in special circumstances were there was specific an entry 129 dealing with mosquito
repellants and hence the Court held that judgment would be covered under entry 129. However, there is no such
corresponding entry in the Haryana General Sales Tax Act and therefore the issue would be whether mosquito
repellant would fall within the entry dealing with insecticide etc. or not? The Hon'ble Madras High Court, the
Tribunal in the case of Transelektra Domestic Products Pvt. Ltd., and others v. Commercial Tax Officer, Porur
Assessment Circle Madras and others has clearly held that mosquito repellants containing 4% Alethrin' was an
insecticide and relying on the judgment of the Hon'ble Madras High Court, the Tribunal in the case of M/s Balsara
Hygiene Products Ltd. Kundli (Sonepat) v. State of Haryana has also held that Mosquito Repellants is an insecticide
and hence liable to concessional rate of tax. The same view has been taken by the Hon'ble Tribunal in the
impugned order and I do not find any infirmity in this order. It has not been contested that Jet Mats does
contain 'Allethrin' which is an insecticide. Hence, in these circumstances, the present review petition is
dismissed."
Being bound by the decision of the Tribunal, the Assessing Authority formed an opinion and returned a finding
that he had no other alternative but to vacate the notice issued by him proposing to levy tax @ 10% instead of 4%
and proceeded to do so.
21. Appearing in support of the appeal, Mr. V. Lakshmikumaran, learned counsel, contended that the Assessing
Authority having passed the order dated 28th March, 2008 taking into consideration the decision of the Tribunal,
which in turn distinguished the decision in Sonic Electrochem (supra), and such decision having attained finality, the
Revisional Authority could not have assumed a jurisdiction to suo motu issue the impugned show-cause notices as well
as the final revisional orders under section 34 of the VAT Act holding that mosquito repellent mats being unscheduled
goods, are taxable at the general rate of tax. According to him, the Revisional Authority was as much bound by the
order of the Tribunal as the Assessing Authority was having regard to the similarity of issues involved and it was not
open to such authority to take a view different from the one expressed by the Tribunal.
22. Our attention was drawn by Mr. Lakshmikumaran to the decision of this Court reported in 1992 SUPP (1) SCC
443 Union of India and Ors. v. Kamlakshi Finance Corporation Ltd.1992 taxmann.com 16/1991 (55) E.L.T. 433 in support of
the proposition that in disposing of quasi-judicial issues before them, the Revenue Officers are bound by the decisions
of the appellate authorities and that the principle of judicial discipline requires that the orders of the higher appellate
authorities are followed unreservedly by the subordinate authorities.
23. Mr. Lakshmikumaran, accordingly, prayed that upon the revisional orders being set aside, the orders of the
Assessing Authority be restored.
24. Per contra, Mr. Alok Sangwan, learned counsel appearing for the respondents, contended that the Revisional
Authority did not exceed its jurisdiction in exercising suo motu powers under section 34 of the VAT Act. By referring to
notifications issued at or about the relevant time amending Schedule C and the decision in Sonic Electrochem (supra),
he sought to argue on the merits of the determination made by the Revisional Authority and how she was right in her
findings that the mosquito repellants manufactured by the appellant were liable to be taxed @ 10% in terms of the
decision in Sonic Electrochem (supra), and not 4% as assessed by the Assessing Authority in the orders under revision.
He also submitted that the orders of the Revisional Authority do not merit interference, and the appeal ought to be
dismissed.
25. At the hearing, we made it clear that the issue as to whether the impugned orders of the Revisional Authority
were sustainable on merits would not be examined unless the Court was persuaded by Mr. Sangwan to accept that
the Revisional Authority did have the authority, competence and jurisdiction to issue the impugned show-cause
notices and pass the consequential final revisional orders impugned in the writ petition enhancing the liability of the
appellant to tax @ 10% instead of 4%.
26. Since section 34 of the VAT Act appears to have been the source of power exercised by the Revisional
Authority, we shall first notice its contents as it stood on the date of the impugned orders, i.e. 2nd March, 2009. Prior
to its amendment with effect from 20th March, 2009, section 34 read as follows:
"Section 34. Revision. : - (1) The Commissioner may, on his own motion, call for the record of any case pending
before, or disposed of by, any taxing authority for the purposes of satisfying himself as to the legality or to the
propriety of any proceeding or of any order made therein which is prejudicial to the interests of the State and
may, after giving the persons concerned a reasonable opportunity of being heard, pass such order in relation
thereto, as he may think fit:
Provided that no order passed by a taxing authority shall be revised on an issue, which on appeal or in any other
proceeding from such order is pending before, or has been settled by, an appellate authority or the High Court
or the Supreme Court, as the case may be:
Provided further that no order shall be revised after the expiry of a period of three years from the date of the
supply of the copy of such order to the assessee except where the order is revised as a result of retrospective
change in law or on the basis of a decision of the Tribunal in a similar case or on the basis of law declared by the
High Court or the Supreme Court."
(2) The State Government may, by notification in the Official Gazette, confer on any officer not below the rank of
Deputy Excise and Taxation Commissioner, the powers of the Commissioner under sub-section (1) to be
exercised subject to such exceptions, conditions and restrictions as may be specified in the notification and
where an officer on whom such power have been conferred passes an order under this section, such order shall
be deemed to have been passed by the Commissioner under sub-section (1)."
27. To the extent relevant for the present decision, suo motu power of revision could be exercised by the
Revisional Authority for the purposes of satisfying himself as to the legality or propriety of any order made in any
proceeding which is prejudicial to the interests of the State. The first proviso, however, imposed a restriction on
exercise of such suo motu power, if an issue had been settled, inter alia, by an appellate authority. Thus, the sine qua
non for exercise of power under section 34 is the satisfaction of the Revisional Authority that an order has been made
by a taxing authority in any proceeding prejudicial to the interests of the State, the legality or propriety of which
appears to him to be prima facie vulnerable. Nevertheless, such power cannot be exercised if the issue involved is
pending before or has been settled by an appellate authority. It cannot be disputed that the Tribunal is
comprehended within the meaning of 'appellate authority' as defined in section 2(b) of the VAT Act.
28. These being the contours of section 34, as it then stood, it needs to be seen how far the Revisional Authority
was justified in drawing power from such provision and exercising it.
29. A bare perusal of the impugned revisional orders reveals that the decision in Sonic Electrochem (supra) formed
the plinth for the satisfaction that the orders of assessment are liable to be revised. The decision in Sonic Electrochem
(supra) was rendered upon consideration of the Gujarat Sales Tax Act, 1969 (hereafter 'the Sales Tax Act', for short).
The short question that arose for a decision was, whether 'Jet Mat' produced by the appellant therein would come
within Entry 129 of Schedule II Part A of the Sales Tax Act, issued under section 49 thereof. Entry 129, at the relevant
point of time, read thus:
Sl. No. Description of goods Rate of sales tax Rate of purchase tax

129 Mosquito repellents Twelve paise in the rupee Twelve Paise in the

30. Having regard to the specific entry, i.e. Entry 129, dealing with mosquito repellents, this Court overruled the
contention of the appellant therein that 'Jet Mat' would not come within the ambit of Entry 129 since one of its
constituents happens to be an insecticide. It was also held that the product manufactured by the appellant therein,
viz. 'Jet Mat', which was commercially known as "Mosquito Repellent Mat" is a mosquito repellant notwithstanding the
fact that it not only repels mosquitoes but is also capable of killing mosquitoes. For the reasons assigned in the
decision, it was held that 'Jet Mat' is not an insecticide which would be entitled for partial exemption under Entry 98 of
the Sales Tax Act.
31. It is, therefore, clear that because of the specific entry dealing with mosquito repellents, this Court held 'Jet
Mat' to be covered under Entry 129.
32. As the Tribunal in its order dated 21st November, 2001 found, there was no such corresponding entry in the
VAT Act. Bearing in mind the same as well as on consideration of a decision of the Madras High Court and other
decisions, the Tribunal had proceeded to hold that mosquito repellents containing 4% 'Alethrin' was an insecticide
and hence, liable to concessional rate of tax.
 33. While deciding the present appeal, we are primarily concerned with the issue of assumption of jurisdiction by
the Revisional Authority on the face of the unchallenged order of the Tribunal dated 21st November, 2001, and not
with the merits of the decision either given by the Tribunal or by the Revisional Authority. What stares at the face of
the respondents is that the aforesaid decision of the Tribunal, quoted in the order of the Assessing Authority, has
attained finality. Once the issue stands finally concluded, the decision binds the State, a fortiori, the Revisional
Authority. The decision of the Tribunal may not be acceptable to the Revisional Authority, but that cannot furnish any
ground to such authority to perceive that it is either not bound by the same or that it need not be followed. The first
proviso, in such a case, gets activated and would operate as a bar to the exercise of powers by the Revisional
Authority.
34. In our view, the Revisional Authority might have been justified in exercising suo motu power to revise the
order of the Assessing Authority had the decision of the Tribunal been set aside or its operation stayed by a
competent Court. So long it is not disputed that the Tribunal's decision, having regard to the framework of
classification of products/tax liability then existing, continues to remain operative and such framework too continues
to remain operative when the impugned revisional orders were made, the Revisional Authority was left with no other
choice but to follow the decision of the Tribunal without any reservation. Unless the discipline of adhering to decisions
made by the higher authorities is maintained, there would be utter chaos in administration of tax laws apart from
undue harassment to assesses. We share the view expressed in Kamlakshi Finance Corporation Ltd. (supra).
35. In the midst of hearing, we had enquired from Mr. Sangwan whether there has been any decision of any other
competent Tribunal or High Court taking a view different from the one taken by the Tribunal in its order dated 21st
November, 2001, which was considered by the Assessing Authority. Fairly, he answered in the negative. If only Mr.
Sangwan could have invited our attention to any such decision, which were acceptable to us, the issue decided by the
Tribunal could have been reopened on the ground that it is a debatable issue and interference with the final orders
passed by the Revisional Authority may not have been resorted to, leaving the appellant to pursue the appellate
remedy under the VAT Act.
36. There is also substance in the contention of Mr. Lakshmikumaran that suo motu power of revision, on the
terms of section 34, could have been exercised only if the orders sought to be revised suffered from any illegality or
impropriety.
37. A decision may be questioned as suffering from an illegality if its maker fails to understand the law that
regulates his decision making power correctly or if he fails to give effect to any law that holds the field and binds the
parties. On the other hand, having regard to the purpose section 34 seeks to serve, to take exception to a decision on
the ground of lack of propriety of any proceedings or order passed in such proceedings, it essentially ought to relate
to a procedural impropriety. It is incumbent for the accuser to show that the decision maker has failed to observe the
standard procedures applicable in case of exercise of his power. Additionally, to impeach an order on the ground of
moral impropriety, it has to be shown that the weight of facts together with the applicable law overwhelmingly points
to one course of action but the decision has surprisingly gone the other way, giving reason to suspect misbehaviour
or misconduct in the sphere of activity of the decision maker warranting a revision.
38. There is nothing on record to justify either illegality or (procedural/moral) impropriety in the proceedings
before the Assessing Authority or the orders passed by him, as such. As noted above, the Assessing Authority was
bound by the order of the Tribunal and elected to follow it having no other option. Such decision of the Tribunal was
even binding on the Revisional Authority. In such circumstances, to brand the orders of the Assessing Authority as
suffering from illegality and impropriety appears to us to be not only unjustified but also demonstrates thorough lack
of understanding of the principle regulating exercise of suo motu revisional power by a quasi-judicial authority apart
from being in breach of the principle of judicial discipline, while confronted with orders passed by a superior
Tribunal/Court. We are inclined to the view that it is not the Assessing Authority's orders but those passed by the
Revisional Authority, which suffer from a patent illegality.
39. For the foregoing reasons, we have no other option but to invalidate the impugned final revisional orders
dated 2nd March, 2009 for the Assessment Years 2003-04 and 2004-05. It is ordered accordingly.
40. The interim order dated 18th January, 2010 is made absolute.
41. The appeal stands allowed. However, the parties are left to bear their own costs.
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MADAN